Charities 'to face £3bn in cuts'

Charities are facing cuts totalling nearly £3 billion over the coming five years due to Government spending reductions, according to a new report.

PUBLISHED: 07:14, Mon, Aug 8, 2011

Charities are facing cuts totalling nearly £3 billion over the coming five years due to Government spending reductions, according to a new report.

The National Council for Voluntary Organisations (NCVO) used figures on the Government's spending plans produced by the Office for Budget Responsibility to calculate what they believe is the first authoritative figure for the impact of the austerity programme on charities.

They found that the voluntary sector will lose around £911 million a year in public funding by 2015/16, with a cumulative loss of £2.8 billion over the five years 2011-16.

Karl Wilding, head of policy and research at NCVO, said: "Putting an authoritative figure on the extent of the cuts to date has been like trying to pin jelly to the wall. Estimates have varied widely and this report provides a solid baseline figure based on the Government's own figures.

"Many charities are unwilling to speak out for fear they will jeopardise other funding streams, but we currently face the perfect storm of an increase in demand and nearly £3 billion public sector cuts - this is a significant cause for concern because it will significantly hamper the ability of charities to support those most in need."

NCVO said that the impact of the cuts will be felt unevenly across the charitable sector, with funding from certain Government departments shrinking more dramatically than others.

The report comes a week after research by the anti-cuts campaign False Economy suggested that more than 2,000 charities are being forced to close services and sack staff as local authorities slash their funding.

Shadow Cabinet Office minister Tessa Jowell said: "What is becoming apparent is the scale of the cuts that charities are facing across the country, which are beginning to undermine the very building blocks of community life."

A Cabinet Office spokesman said: "Big Society offers the voluntary sector many new opportunities to grow. Our reforms will allow the voluntary sector to bid for public service contracts worth billions of pounds. Just last week Big Society Capital launched with an expected £600 million to give the sector access to much-needed finance, which will help them expand and bid for these new contracts."

TUC general secretary Brendan Barber said: "This authoritative research shows that for all the warm words about the Big Society, the Government has created a funding crisis for charities with many scaling back or cutting services altogether. With the public sector shrinking and voluntary groups focusing on survival rather than expansion, private companies are eyeing up the huge profits to be made from running our public services."

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